Optimizing the in-store retail experience

Despite all the data retailers can collect about their operations today, the figurative last mile — the brick-and-mortar store — is still a black box.

When shoppers go through the virtual doors of an online retailer, their every move can be tracked: which departments they visit, how they find a particular item, how long they look at it, whether they put it in the shopping cart, and more. But in a brick and-mortar store, often the only thing that’s regularly tracked is what customers buy. Who really knows where shoppers linger, which displays catch their eye, or which products they pick up and then put back down?

The truth is, retailers struggle to understand the in-store shopping environment and their customers’ retail experience. Retailers can’t see, in real time and all the time, where customers go or what they do with the products as they shop. And without that information, retailers have a hard time optimizing in-store operations, nor can they add that information to the point-of-sale, logistics, supply chain and other data they collect, including online and mobile customer data.

Geomatics is the analytics and management of geospatial data. Geomatics is a powerful digital capability for tracking and analyzing a retailer’s brick-and-mortar space.

Enter geomatics, the analytics and management of geospatial data. Geomatics is a powerful digital capability for tracking and analyzing a retailer’s brick-and-mortar space. Retailers can use geomatics to create a digital picture of a retail space that’s automatically updated to accurately portray customers’ experiences. By gathering in-store location-based metrics, retailers can leverage geomatics to better understand and improve their customers’ in-store experience.

Gathering this data involves using advanced presence technology such as lasers in the form of light detection and ranging (lidar) sensors, 3D facial sensors, long range, low-power (LoRa) wireless systems for internet of things (IoT) applications, and Bluetooth tags with multisensor functionality and machine learning, along with more established technologies such as real-time location systems (RTLS), geofencing, WiFi tracking, RFID and IoT.

While a necessary and meaningful prerequisite, it isn’t enough to capture in-store presences and tracking data alone. When the data is combined with what customers are actually purchasing, retailers have access to the same kind of insights they get online. When analytics are applied, retailers have the information they need to fine-tune customer interactions and customer intimacy. They can optimize demand forecasts; improve product placement, floor plans and in-store design; and even adjust employee scheduling, tasks and placement.

The end of brick-and-mortar? Hardly.

Online and mobile retail sales had a banner year in 2017. On Cyber Monday alone, online sales topped $6.5 billion,1 making it the biggest sales day ever for online and mobile sales in the United States. (Cyber Monday is the Monday after the Thanksgiving holiday.)

Brick-and-mortar retail’s performance, however, has been somewhat mixed. While retail sales overall are rising, and retailers continue to hone sales and marketing tactics and shift labor to bolster e-commerce and weather any downturns for in-store operations, thousands of stores closed their doors in 2017, a significant increase from the year before.2 But research also indicates that new brick-and-mortar stores are opening to counter the losses.3 And when one of the world’s biggest online retailers, Amazon, plunks down $13.7 billion to buy a major brick-and-mortar chain, Whole Foods, the message is clear: It’s way too soon to declare the end of the in-store experience. Traditional shopping is still central to modern commerce.

Retailers need to evolve their brick-and-mortar stores to create a more engaging and intimate shopping experience. The only way to do that is to take a more scientific approach. Retailers need to apply technology to uncover customer pain points, gaps in service, low inventory, overstocks, ineffective merchandising, disorganized or inefficient traffic flows, missed sales opportunities and more. Further, they need to facilitate seamless experiences that span the digital and physical realms. The crux is doing so with a customer-centric mind-set.

The art and science of in-store tracking

Much of the information captured in a store using geomatics is similar to what can be gathered online, with one major difference: When it comes to customers, in-store tracking should remain anonymous. Although today’s tech-savvy consumer is ready and willing to shop, bank and do much more online, most people still dislike it when companies collect data about them, especially when that data is sold or used to spam them. Even though nearly every U.S. adult carries a smartphone, most do not want their smart devices being used to track their every move.

Capturing customers’ in-store experience can be done easily without capturing any personally identifiable information. Why track the customer when you can track the shopping cart? Why not smart-enable the employees, and give them location-enabled tools and real-time intelligence? Why not track products so their movements can be captured and used to better understand which products are most interesting to customers, which ones get looked at but not bought, and more? Product tracking also makes inventory and audits more accurate and efficient.

LiDAR is a remote sensing method that uses light in the form of a pulsed laser to measure ranges and generate precise, three-dimensional information. It is not a new technology. Scientists at the National Oceanic and Atmospheric Administration (NOAA), for example, have been using LiDAR for years to produce more accurate shoreline maps and make digital elevation models for use in geographic information systems and other applications. Lidar has become a key component in self-driving cars. As the technology continues to evolve and its price point drops, its use in retail and other applications will rise. Because the 3D images LiDAR creates do not provide any personally identifiable information, LiDAR is an ideal technology to map the interior of a store and track the movement of things, including people, within it.

Many retail operations already have closed-circuit television (CCTV) cameras installed for security purposes and for tracking how customers move through stores. WiFi hot spots strategically placed throughout a store can also capture customer movement by anonymously tracking the WiFi connectivity that’s often left activated on people’s smartphones. And as customers’ Bluetooth-enabled phones come close to shelves, displays or even products tagged with Bluetooth-enabled beacons, retailers can determine — also anonymously — how long a customer peruses that display or product. Pressure- and heat-sensitive tags on products can also be used to determine whether a product is picked up and how long it is held. That kind of information can tell a retailer that one jacket style got tried on dozens of times in a week, while another was never even taken off the rack.

Products tagged with RFID and Bluetooth also can provide critical inventory information. Employees carrying lightweight handhelds can more easily run inventories. Smart shelves can do so automatically. And if a customer can’t find a medium-size shirt in blue on the rack, a quick search on the handheld could reveal that the shirt is in the store but currently in a dressing room. Integrating the inventory data with point-of-sale (POS) systems and even supply chain and fulfillment information can also make it easier for employees to answer customers’ questions about product availability. Maybe there are no medium-size blue shirts in stock, but more will be arriving the next day.

Emerging technologies such as facial recognition can give employees cues about how customers are feeling as they shop. Walmart is reportedly experimenting with technology that uses video cameras to monitor customers’ facial expressions and movements as they stand in line to check out.4 If the system detects an unhappy customer, it can alert employees to report to a register.